On paddy MSP, BJP talks economics to PM

The BJP today accused Prime Minister Manmohan Singh of forgetting basic economics for rejecting the party's demand for raising the minimum support price (MSP) of paddy to Rs 1,000 per quintal.

Singh told a BJP delegation yesterday the move would lead to a rise in the price of rice.

"The prime minister obviously has forgotten basic economics. Prices are ruled by demand and supply. Low remuneration for paddy will lead to farmers switching to other crops, which will lower supply and raise prices. A rational computing of paddy input costs will show that the MSP needs to be raised," said BJP spokesperson Prakash Javadekar.

"If the country produces more paddy, the prices will come down. This is economic reality and will guarantee higher incomes to farmers and reasonable prices to consumers. The government is overlooking this vital aspect. There is no policy to narrow the gap between what the producer gets and what the consumer pays," he said.

He said the 11th Five-Year Plan targeted 10 million tonnes of additional rice production. "This cannot be achieved unless the farmer is ensured a good price and new technology is imbibed in the cultivation process," he added.

Javadekar said the government had tacitly accepted the recommendation of Dr MS Swaminathan to fix the MSP for wheat by adding 50 per cent to the cost of production as calculated by the Commission of Agricultural Costs and Prices.

"The BJP demands same justice for paddy-growers. This is justified as the costs calculated by the commission are not transparent and always undervalued," he said.